Africa Connected’s journey to the Pearl of Africa

On her seventh fact-finding mission to share Africa’s true opportunities and challenges, acclaimed 702 journalist Nikiwe Bikitsha travels to Uganda. Once described by Winston Churchill as the “Pearl of Africa” for its “magnificence, for variety of form and colour…for vast scale”, this East African country is now drawing increasing international interest for all this and so much more.

As the rest of East Africa blossoms, Uganda is growing into a prime investment destination. According to the United Nations Conference on Trade and Development World Investment report, it received the most foreign direct investment (FDI) in the region over the last three years. The reasons are obvious: Uganda boasts large, under-exploited mineral deposits of gold, tin and tungsten among others, and occupies a strategic base in the heart of sub-Saharan Africa, making it a regional hub for trade.

However, the greatest draw for investors presently is arguably the country’s abundant energy potential. Uganda recently discovered an estimated 3.5 billion barrels of oil off Lake Albert, a landmark it shares with the DRC. This discovery is pushing FDI in its energy sectors, but what can’t be overlooked is that other significant, though underdeveloped, sectors will soon grow to support “Big Oil”. Smart investors and entrepreneurs may want to consider the following areas for investment:

Construction: As oil executives arrive in Uganda, the demand for hotels will rise, but the predicted construction boom won’t end there. Past strong growth in real estate is expected to continue as population growth settles on about 3.5% and the country struggles with a housing deficit.

To support the coming oil boom, infrastructure, particularly roads, needs to be upgraded. Ugandan President Yoweri Museveni believes transport will be as important as refineries in transforming the economy.

Services: Demand for services will follow the oil boom, particularly for restaurants, office space, logistics and medical care. Oil investors currently in Uganda foresee difficulties in accessing the above, and also supplying them to employees stationed at settlements that emerge near oil deposits.

Agriculture: As a major producer of coffee, bananas, tea, cotton and tobacco, Uganda has the potential to be the food basket of East Africa if more investment is funnelled into processing agricultural products. Opportunities abound in the manufacture of fertilisers and pesticides; the supply of agricultural machinery; the establishment of cold storage facilities; and the production of packing materials.

Coupled with these opportunities is Uganda’s liberal, well-regulated economy in which all sectors are game for investment, and the free movement of capital is a given. Ugandan law also allows for the full repatriation of profits and 100% foreign ownership of private investment.

Looking at the evidence, “the Pearl of Africa” is an investor’s paradise. This is what Nikiwe will confirm. She’ll speak to a number of experts in the mining, agriculture and financial services sectors to get a fair, factual view, from Stanbic’s Chief Executive Patrick Mweheire to small-scale farmer Dr Diana Nambutya Nsubuya. Follow her on Twitter for the true story.